3) ICD-9 doesn’t support the latest diagnoses and procedures, and ICD-10 does.

Regarding #1, who cares? Coding standards are intrinsically arbitrary. Sequels are not necessarily better than their predecessors.

Although #2 sounds nice, there are a lot of problems with the supposed “value” of more granular data in practice. Following the classic 80-20 rule of life (80% of value comes from 20% of activity), the majority of codes are rarely used. By increasing the number of codes six-fold, the system is creating 6x the opportunities to inaccurately code. There is no reason to believe that providers will more accurately code, but the chances of incorrect diagnosis are now significantly higher than they were before. Garbage in, garbage out.

Below are some specific examples of how increasing the number of codes will affect processes in the healthcare system:

Payers – payers argue that making codes more granular will improve efficiency in the reimbursement process by removing ambiguity. There is nothing further from the truth. Payers will use the new granularity to further discriminate against providers and reject claims for what will appear to be no reason. With 6x the number of codes, there are at least 6x as many opportunities for payers to reject claims.

Clinical trials – ICD-10 proponents like to argue that with more granular diagnosis codes, companies like ePatientFinder can more effectively find patients and match them to clinical trials. This notion is predicated on the ability of providers to enter the correct diagnosis codes into EMRs, which is a poor assumption. Further, it doesn’t actually address the fundamental challenges of clinical trials recruitment, namely provider education, patient education, and the fact that most patients aren’t limited to trials by diagnosis codes, but rather by other data points (such as number of years with a given disease and comorbidities).

Public health – ICD-10 proponents also claim that the new coding system will help public health officials make better decisions. Again, this is predicated on accuracy of data, which is a poor assumption. But the greater challenge is that the most pressing public health issues of our time simply don’t need any more granularity in diagnosis codes. Public health officials already know what the top 20 public health problems are. Adding 6x the number of codes will not help address public health issues.

Regarding #3, why do we need to reinvent the entire coding system and make the entire system more granular to accommodate new diagnoses and procedures? Why can’t we continue to use the existing structure and simply create new branches of the ICD tree using alphanumeric characters? Why do we need to complicate every existing diagnosis and procedure to support new diagnoses and treatments? We don’t. There are plenty of letters left to be utilized in ICD-9 to accommodate new discoveries in medicine.

Next, I’ll provide a very brief summary of the enormity of the cost associated with transitioning from ICD-9 to ICD-10. The root of the challenge is that a string of interconnected entities, none of whom want to work with one another or even see one another, must execute in sync for the months and years leading up to the transition. Below is a synopsis of how the stars must align:

EMR vendors – EMR vendors must upgrade their entire client base to ICD-10 compliant versions of their systems in the next couple of months to begin testing ICD-10 based claims. Given the timescales at which providers move, the burden of MU2 on vendors, and the upgrade cycles for EMR vendors, this is a daunting challenge.

Providers – providers don’t want to learn a new coding system, and don’t want to see 6 times the number of codes when they search for basic clinical terms. Companies such as IMO can mitigate a lot of this, but only a small percentage of providers use EMRs that have integrated with IMO.

Coding vendors – like EMR vendors, auto-coding vendors must upgrade their clients systems now to one that supports dual coding for ICD-9 and ICD-10. They must also incur significant costs to add in a host of new ICD-10 based rules and mappings.

Coders – coders must achieve dual certification in ICD-9 and ICD-10, and must double-code all claims during the transition period to ensure no hiccups when the final cut over takes place.

Clearinghouses – clearinghouses must upgrade their systems to support both ICD-9 and ICD-10 and all of the new rules behind ICD-10, and must process an artificially inflated number of claims because of the volume of double-coded claims coming from providers.

Payers – payers must upgrade their systems to receive both ICD-9 and ICD-10 claims, process both, and provide results to clearinghouses and providers about accuracy to help providers ensure that everyone will be ready for the cut over to ICD-10.

The paragraphs above do not describe even 10% of the complexity involved in the transition. Reality is far more nuanced and complicated. It’s clear from the above that the likelihood that all of the parties can upgrade their systems, train their staff, and double code claims is dubious. The system is simply too convoluted with too many intertwined but unaligned puzzle pieces to make such a dramatic transition by a fixed drop-dead date.

Lastly, switching to ICD-10 now seems a bit shortsighted in light of the changes going on in the US healthcare system today. ICD-10 is already a decade old, and in no way reflects what we’re learning as we transition from volume to value models of care. It will make sense to change coding schemes at some point, but only when it’s widely understood what the future of healthcare delivery in the US will look like. As of today, no one knows what healthcare delivery will look like in 10 years, let alone 20. Why should we incur the enormous costs of the ICD-10 transition when we know what we’re transitioning to was never designed to accommodate a future we’re heading towards?

At the end of the day, the biggest winners as a result of this transition are the consultants and vendors who’re supporting providers in making the transition. And the payers who can come up with more reasons not to pay claims. Some have claimed that HHS is doing this to reduce Medicare reimbursements to artificially lower costs. Although the incentives are aligned to encourage malicious behavior, I think it’s unlikely the feds are being malicious. There are far easier ways to save money than this painful transition.

The ICD-10 transition may be one of the largest and most complex IT coordination projects in the history of mankind. And it creates almost no value. If you can think of a larger transition in technology history that has destroyed more value than the ICD-9 to ICD-10 transition in the US, please leave a comment. I’m always curious to learn more.

17 responses to "Why ICD-10?"

Wow! How does the author really feel? For someone who has as much stated healthcare experience, he sure seems to have drank the AMA’s anti-ICD-10 Kool-aid. Besides also joining the “Call of ICD-10” party rather late in the game.

I’ll state one reason why ICD-10 codes are needed: “Better risk identification, assessment, reimbursement and management.” Read up on 3R’s, HCC’s and RAF’s. We’re all going to have a RAF soon and ICD-10’s are how they will be derived and assigned.

Here’s my quick Monday morning comments on this post:

1. “Payers will use the new granularity to further discriminate against providers and reject claims for what will appear to be no reason.”

Pure conjecture. No basis for stating this – though I suppose it’ll win the author brownie points with the AMA and MGMA.

There are important subsets and nuances within existing diagnoses categorizations which are identified and stratified by ICD-10.

3. “The root of the challenge is that a string of interconnected entities, none of whom want to work with one another or even see one another, must execute in sync for the months and years leading up to the transition.”

Seriously? Should one side just take their ball and go home? It appears to me the author hasn’t been keeping up to date on the merging of payers and providers occurring in the form of the very “volume to value models of care” the author mentions: ACO’s, pay-for-performance and risk sharing partnerships. EMR vendors have known about ICD-10 for years.

I can’t disagree more with the following…
The ICD-10 transition may be one of the largest and most complex IT coordination projects in the history of mankind. And it creates almost no value.

… and it is good to see that Steve took some time to articulate just a few reasons why. The reality is that we are running the most expensive and out of control (from a cost growth perspective) component of our economy on a system designed in the 1970’s. Much has changed since then and ICD-10 was designed to closer meet the realities of today…

Would you be willing to go back to communicating with a rotary phone on your kitchen wall (also from the 70’s) telegrams, and US Mail?

I need my family’s doctors to document my condition better so they can be paid more effectively and efficiently and so I can manage my health better. We all do.

1) Why won’t payers discriminate further? They have more granular data points to do so. If payers can discriminate further, they will. They have no reason not to.

2) Why do we need ICD-10 codes to help with further stratification in pop health? Why can’t even primitive forms of NLP do the same thing? Why do we need to impose costs across every layer of the value chain in order to do what software can automatically do?

3) Your argument is true, but doesn’t really reduce the cost of transition. Just because some payers and providers are merging, doesn’t mean that all have, and that still doesn’t address the enormous complexity of changing interrelated workflows between everyone from the providers to the payers.

4) Regarding double-coding, every major healthcare organization is double-coding in the transition leading up to ICD-10 to ensure that they are coding correctly. Providers simply cannot afford to risk losing cash flow if their coders code incorrectly when the transition takes place. The cost of being wrong is simply too high.

I’d suggest you take a look at John Halamka’s recent post on ICD-10. The feds suggested that it would cost a hospital such as BIDMC $500k to switch. Their total cost of transition will be closer to $8M. So to justify the cost (without even taking into account opportunity cost), the additional value of granular data needs to generate $8M worth of better decisions (excluding opportunity cost of capital).

Kyle, you are exactly on point. I’m sorry, but the rest of you are living in a dream world, cuz out here in the trenches, it’s pretty bloody, and about to get bloodier.

You want to know the real reason CMS/HHS has to push this? The Medicare spending is at the beginning of an avalanche. I heard one commentator say that if we could get a grip on Medicare spending, we would have the budget under control — bet he’s right.

CMS will have a good basis for denials — they have to cut that spending. Payers are going to be collecting premiums and not paying providers — and the office staffs are usually not agressive about getting paid, arguing claims or doing appeals.

It all adds up to a lot of blood on the ground — which is not going to be payer blood.

1) Why won’t payers discriminate further? They have more granular data points to do so. If payers can discriminate further, they will. They have no reason not to.

SS: So says you. Your opinion. Where is any proof that payers will discriminate?

2) Why do we need ICD-10 codes to help with further stratification in pop health? Why can’t even primitive forms of NLP do the same thing? Why do we need to impose costs across every layer of the value chain in order to do what software can automatically do?

SS: What’s NLP going to do? What is the NLP’s output? Give me an example. You can’t because it doesn’t exist.

4) Regarding double-coding, every major healthcare organization is double-coding in the transition leading up to ICD-10 to ensure that they are coding correctly. Providers simply cannot afford to risk losing cash flow if their coders code incorrectly when the transition takes place. The cost of being wrong is simply too high.

SS: Where do you get this info that “every major healthcare organization is double-coding?”

I’d suggest you take a look at John Halamka’s recent post on ICD-10. The feds suggested that it would cost a hospital such as BIDMC $500k to switch. Their total cost of transition will be closer to $8M. So to justify the cost (without even taking into account opportunity cost), the additional value of granular data needs to generate $8M worth of better decisions (excluding opportunity cost of capital).

SS: I’ve read all of Halamka’s posts. He’s a smart guy for sure. If you want to take an Expected Value approach to making decisions then probably 80% of the things we do and what the government mandates wouldn’t pass muster. IMO a weak argument.

Hi John – I spent 30 minutes on an eloquent response last night and it got lost as I dropped my iPad. Sorry in advance for the brevity.

Yes is the answer to your questions. For those providers that have taken ICD-10 seriously and viewed it strategically from the beginning there are plenty of opportunities to differentiate themselves through efficiency and improved quality. I don’t really understand anyone that would advocate continuing to run our healthcare system on ICD-9. Dr’s have been complaining for years that they are not being reimbursed adequately. Now that the time has come for change, they are balking for a lot of reasons.

I believe that those that have embraced ICD-10 and 1) really improved their documentation processes 2) got started on #bigdata 3) streamlined applications/systems will be the winners in the transition. Further, I believe the procrastinators and the laggards run a huge risk of going bankrupt and they will be working for the winners soon after Oct 1.

The timing of the transition is AWFUL, TERRIBLE,STUPID, etc. We should have made the change in 2001-4 when there was little else going on.

I am hesitant to jump into the Health Plan debate above. But I believe that Health Plans will do a much better job embracing the the improved specificity and granularity. I don’t want to go as far as saying that they are going to try and hurt providers with the new data, but they have many years for data warehouse/business intelligence/#bigdata experience and they will more quickly adapt to more/improved data.

Finally, as I become closer and closer to being a “real consumer” in healthcare, I will be demanding more specificity and less nonsense from my providers. I can tell you with great certainty that I won’t pay any bills for “non-specific conditions” unless there is a great amount of detail supporting the charge.

I can’t believe this debate is happening now… that ship left long ago. Why aren’t we talking about #ICD10Testing and how little is being supported by vendors, clearinghouses, and payers?
Thanks for the dialogue! Jeo

[…] want to read two opposing arguments for and against ICD-10: The Forgotten Argument For ICD-10 and Why ICD-10? Plus, below is a guest blog post by Heidi Kollmorgen, Founder of HD Medical Solutions, putting some […]

I see both sides of the ICD-10 issue and in reality, the same arguments relate to ICD-9 and many other clinical studies overall. It all comes down to the documentation. Insurance companies want accurate codes on the claims form and coders can only provide codes based on what the doctor writes. The current coding set we use works, but even ICD-9 would work better with accurate documentation on the physicians part.
As a coder using either set, I still need to know more than “Improved from last visit” or “DM”. A certified coder knows DM is Diabetes Mellitus, but just because a patient says they are on insulin I can’t assign the proper code unless the doctor includes that important information. If he/she doesn’t amend their note, I can use “unspecified” but is that right? Is that fair to the patient or a future doctor who gets a copy of the medical record when the patient is unconcious at the ER?

Costs and time aside, it doesn’t matter if it’s ICD-9 or 10, documentation on the professional side must improve. A hospital documented with “DM” would surely be flagged for a query so why is it okay in private practice? “Garbage in, garbage out” applies to this scenario as well.

In regards to all the costs, you describe them as if they haven’t begun. Most of the examples listed have already taken the required steps and were prepared for the ICD-10 implementation. Now, they are shelving all the projects, progress and effort made with tentative plans to pick up where we left off next year. Should that be considered okay in anything regarding healthcare?

In an effort to address the notion how data granularity is not important to the top twenty diseases the healthcare profession is already aware of, how do you suppose those twenty diseases were identified? Are you aware how trends are studied and followed in order to improve treatment and care of those patients? Please take a moment to review the following study by the NCVHS which is comprised of eighteen members appointed by the HHS and Congress. http://www.ncbi.nlm.nih.gov/books/NBK54296/

As a vendor with 30 years of experience with private practices, who has spent millions of dollars developing software since 2010 to the government standards for certification and ICD-10, I appreciate reading the alternative views expressed by this blogger. Even though I am naturally resentful for having had to place the government’s agenda ahead of my client’s and my company’s, we have had to do so to compete with other vendors who have threatened doctors in private practice with ICD-10 for more than a year to motivate them to buy their courses or engage their consulting services or retain their billing services.

Just one day after the President signed the legislation, I have already read press releases issued by several of my competitors that reconfirm the inevitability of ICD-10, which somehow benefits them. Our software accommodates ICD-10, but it should be especially obvious to everyone today that the only thing that is inevitable is death and taxes, not ICD-10. The vote was bipartisan in both the House and the Senate, and the President signed.

As an American, I see hospitals as the most dangerous place in the world to be, and I only go or send my children to a hospital when there is no alternative. I treasure the fact that I can choose a doctor by their reputation. My greatest concern as an American and as a healthcare consumer is the number of doctors who are leaving and are threatening to leave the practice of medicine. The fear of ICD-10 is often cited by them. After the Senate passed the bill to delay ICD-10 for at least a year, there were 187 comments on Medscape in a matter of hours, primarily by doctors, several of whom said they were considering delaying their early retirement for at least another year.

As my partner and I have done for 30 years, we will champion and support doctors and dentists in private practice by providing them the software solutions they require to practice medicine and run their business profitably, no matter what. With us, our doctor clients always come first.

[…] That doesn’t characterize ICD-10 to be sure. Perhaps it does pretty well in the unambiguous department. But like most classifications, it’s a weak representation of the real world: a crude hierarchy trying to reflect many vectors of interlocking effects–for instance, the various complications associated with diabetes. And although ICD-10 may lead to more precise records, the cost of conversion is so burdensome that the American Medical Association has asked the government to just let doctors spend their money on more pressing needs. The conversion has also been ruthlessly criticized on the EMR & EHR site. […]

It seems the point of all getting coordinated and making this work is overstated. I happened to work for a vendor prior to coming to the hospital. That vendor has been ready for iCD 10 for two years. The clearing house we use had been ready. Our billing staff is ready. Providers, well they are providers, not so ready. But…now we are faced with another year of delay, and all the prep we have done is for naught. Next year, or the year after, or the one after that, we will have to invest even more in re-training. Let’s swallow the pill and get it over with I say.